Direct from the Desk of Dory Cameron…. an update for May 19, 2009.

Over the last year, I have secretly begged the Bank of Canada to lower their rate. I have also secretly hoped that Kuwait oilfields would erupt in a sea of fire. I have prayed that people from all over the world would flock to Calgary as the best and most stable place on earth to live. None of this happened. Still, we desperately needed something to reduce the 8,000 listing that we’ve seen over the last year. The market has been gravely overloaded with an excess supply of homes. Sellers were their own worst enemy. Many listed in the hopes of trying to sell their homes when in fact they should have just been content in their current home and rode out the recessionary storm. The only thing they landed up doing was driving the price of their home down even further!

But now we see starter homes are doing very well. That means houses in virtually any area of Calgary up to $350,000 are being nicely scooped up by first-time buyers. This thanks in part to the historically low interest rates coming out of the Bank of Canada as well as speculation of oil prices . Who’s buying these starter homes? Renters paying high rents and condo owners wanting to get out of the condo racket while they still can.

What is the condo market doing? Still its condos listed at the best price get the buyer these days, but at least some of these condos are finally being bought. This should help ease the warp speed at which condo prices have been falling. In fact, between March and April of this year, condo values decreased by 2% in value. Yep, in just one month, folks, condos have decreased that much! Condos still prove to be a poor investment. (Insider trading tip: Overall, condos have never been the best investment).

What about higher-end homes and acreages? Acreages remain strong, mainly due to the demand for land. We are now seeing subdivisions of less than 1 acre as opposed to the typical 2 acre to 4 acre parcels. This makes acreages with land over 2 acres more scarce. As time proves, you will start to see acreages with 4 acres obtain exponentially higher sale prices. Alternately, higher-end homes are finally selling but in no way are we seeing price increases right now. I suspect it won’t be until spring 2010 that we can even remotely entertain an increase in values for anything $500,000 and over. But heck, a year ago these homes weren’t even getting showings!

What about step-up homes such as those with double attached garages in the $400,000 to $500,000 range? There is some good movement here. We’ve yet to see a price increase for these homes. With increased speculation and continued lower interest rates, these homes are set to see increases in value sometime in 2010.

PROVEN ADVICE OF THE DAY…if you are selling your starter home and looking to upgrade your standard of living to something with a garage or more square footage…. Now’s the time!!! One-step-up homes are sure to start showing price increase in 2010 and right now there are some unbelievable deals going on.

So where do the investors stand in all of this? I don’t see investors jumping into the market right now. Most have been burned from the substantial decrease in property values from 2006. Coupled with the rental marketing softening, investors are left disappointed, double mortgaged or just plain broke. Many of my clients who say if they can’t get the price they want for their condo or house will then simply rent it out. These people are just kidding themselves. Its not so easy these days folks! I’m receiving a marked increase in calls to list properties from landlords who just can’t get tenants for their properties and they now need to sell them quickly to get rid of them. In my fellowship meetings I ask questions from experienced property managers on how the rental market is going. All of them are saying the same thing… there is a higher vacancy rate, rents seem to be dropping and unless investors are wanting to be double mortgaged they might as well sell the house or condo.

Overall, Calgarians are breathing a sigh of relief these days! There are very strong signs of good solid economic growth in Calgary right now. For me, joy will come once those seismic trucks start flying down Highway 2 and the Deerfoot. All hail to the price of oil!!!!